Question 1

Cost allocation is the assignment of ____ costs to one or more products using a reasonable basis.

Accepted Answer

A) yes yes 
B) yes no 
C) no no 
D) no yes 
A) yes yes 
B) yes no 
C) no no 
D) no yes

Question 2

Alpha,Beta,and Gamma Companies Three new companies (Alpha,Beta,and Gamma)began operations on January 1 of the current year.Consider the following operating costs that were incurred by these companies during the complete calendar year:
  Refer to Alpha,Beta,and Gamma Companies.Based on sales of 7,000 units,which company will report the greater income before income taxes if absorption costing is used?

Accepted Answer

A) Alpha Company 
B) Beta Company 
C) Gamma Company 
D) All of the companies will report the same income. 
A) Alpha Company 
B) Beta Company 
C) Gamma Company 
D) All of the companies will report the same income.

Question 3

If overapplied factory overhead is immaterial,the account is closed by a debit to Cost of Goods Sold.

Accepted Answer

A) True 
 B)False

Question 4

Kellman Corporation Kellman Corporation produces a single product that sells for $7.00 per unit.Standard capacity is 100,000 units per year; 100,000 units were produced and 80,000 units were sold during the year.Manufacturing costs and selling and administrative expenses are presented below.
There were no variances from the standard variable costs.Any under- or overapplied overhead is written off directly at year-end as an adjustment to cost of goods sold.
  Kellman Corporation had no inventory at the beginning of the year.
Refer to Kellman Corporation.What is the net income under variable costing?

Accepted Answer

A) $50,000 
B) $80,000 
C) $90,000 
D) $120,000 
A) $50,000 
B) $80,000 
C) $90,000 
D) $120,000

Question 5

Actual overhead exceeds applied overhead and the amount is immaterial.Which of the following will be true? Upon closing,

Accepted Answer

A) underapplied increase 
B) overapplied decrease 
C) overapplied increase 
D) underapplied decrease 
A) underapplied increase 
B) overapplied decrease 
C) overapplied increase 
D) underapplied decrease

Question 6

List and explain the four alternative measures of capacity.

Accepted Answer

Theoretical capacity--This is the estima

Question 7

In relationship to changes in activity,variable overhead changes

Accepted Answer

A) no no 
B) no yes 
C) yes yes 
D) yes no 
A) no no 
B) no yes 
C) yes yes 
D) yes no

Question 8

Which of the following is not a reason to use predetermined overhead rates?

Accepted Answer

A) to overcome the problems of assigning overhead to diverse types of products 
B) to compensate for fluctuations in monthly overhead costs 
C) to provide a means for assigning overhead during the period rather than at the end of the period 
D) to smooth out the amount of overhead cost assigned to products when monthly production activity differs 
A) to overcome the problems of assigning overhead to diverse types of products 
B) to compensate for fluctuations in monthly overhead costs 
C) to provide a means for assigning overhead during the period rather than at the end of the period 
D) to smooth out the amount of overhead cost assigned to products when monthly production activity differs

Question 9

A performance measure that encompasses a firm's long-run average activity is referred to as ____________________ capacity.

Accepted Answer

The answer of A performance measure that encompasses a firm's...

Question 10

Oakwood Corporation Oakwood Corporation produces a single product.The following cost structure applied to its first year of operations:
  Refer to Oakwood Corporation.Assume for this question only that Oakwood Corporation manufactured 5,000 units and sold 4,000 in the current year.If Oakwood employs a costing system based on variable costs,the company would end the current year with a finished goods inventory of

Accepted Answer

A) $4,000. 
B) $8,000. 
C) $6,000. 
D) $5,000. 
A) $4,000. 
B) $8,000. 
C) $6,000. 
D) $5,000.

Question 11

Which of the following costs will vary directly with the level of production?

Accepted Answer

A) total manufacturing costs 
B) total period costs 
C) variable period costs 
D) variable product costs 
A) total manufacturing costs 
B) total period costs 
C) variable period costs 
D) variable product costs

Question 12

In the formula y = a + bX,y represents

Accepted Answer

A) fixed costs. 
B) total cost. 
C) variable costs. 
D) mixed costs. 
A) fixed costs. 
B) total cost. 
C) variable costs. 
D) mixed costs.

Question 13

The difference between the reported income under absorption and variable costing is attributable to the difference in the

Accepted Answer

A) income statement formats. 
B) treatment of fixed manufacturing overhead. 
C) treatment of variable manufacturing overhead. 
D) treatment of variable selling,general,and administrative expenses. 
A) income statement formats. 
B) treatment of fixed manufacturing overhead. 
C) treatment of variable manufacturing overhead. 
D) treatment of variable selling,general,and administrative expenses.

Question 14

Dynamic Corporation had the following data regarding monthly power costs:   Assume that management expects 500 machine hours in May.Using the high-low method,calculate May's power cost using machine hours as the basis for prediction.

Accepted Answer

A) $700 
B) $705 
C) $710 
D) $1,320 
A) $700 
B) $705 
C) $710 
D) $1,320

Question 15

If actual overhead exceeds applied overhead,factory overhead is said to be underapplied.

Accepted Answer

A) True 
 B)False

Question 16

Predetermined overhead rates are computed based on

Accepted Answer

A) yes yes 
B) yes no 
C) no yes 
D) no no 
A) yes yes 
B) yes no 
C) no yes 
D) no no

Question 17

A firm has fixed costs of $200,000 and variable costs per unit of $6.It plans on selling 40,000 units in the coming year.To realize a profit of $20,000,the firm must have a sales price per unit of at least

Accepted Answer

A) $11.00. 
B) $11.50. 
C) $10.00. 
D) $10.50. 
A) $11.00. 
B) $11.50. 
C) $10.00. 
D) $10.50.

Question 18

A mixed cost has which of the following components?

Accepted Answer

A) yes no 
B) yes yes 
C) no no 
D) no yes 
A) yes no 
B) yes yes 
C) no no 
D) no yes

Question 19

Phantom profits result when absorption costing is used and sales exceed production.

Accepted Answer

A) True 
 B)False

Question 20

If underapplied factory overhead is immaterial,the account is closed by a debit to Cost of Goods Sold.

Accepted Answer

A) True 
 B)False

Cost allocation is the assignment of ____ costs to one or more products using a reasonable basis.

If overapplied factory overhead is immaterial,the account is closed by a debit to Cost of Goods Sold.

Actual overhead exceeds applied overhead and the amount is immaterial.Which of the following will be true? Upon closing,

List and explain the four alternative measures of capacity.

In relationship to changes in activity,variable overhead changes

Which of the following is not a reason to use predetermined overhead rates?

A performance measure that encompasses a firm's long-run average activity is referred to as ____________________ capacity.

Which of the following costs will vary directly with the level of production?

In the formula y = a + bX,y represents

The difference between the reported income under absorption and variable costing is attributable to the difference in the

Dynamic Corporation had the following data regarding monthly power costs: Assume that management expects 500 machine hours in May.Using the high-low method,calculate May's power cost using machine hours as the basis for prediction.

If actual overhead exceeds applied overhead,factory overhead is said to be underapplied.

Predetermined overhead rates are computed based on

A firm has fixed costs of $200,000 and variable costs per unit of $6.It plans on selling 40,000 units in the coming year.To realize a profit of $20,000,the firm must have a sales price per unit of at least

A mixed cost has which of the following components?

Phantom profits result when absorption costing is used and sales exceed production.

If underapplied factory overhead is immaterial,the account is closed by a debit to Cost of Goods Sold.

Introduction to Cost Accounting

Cost Terminology and Cost Behaviors

Activity-Based Management and Activity-Based Costing

Job Order Costing

Process Costing

Standard Costing and Variance Analysis

The Master Budget

Break-Even Point and Cost-Volume-Profit Analysis

Relevant Information for Decision Making

Allocation of Joint Costs and Accounting for By-Products

Introduction to Cost Management Systems

Responsibility Accounting, support Department Allocations, and Transfer Pricing

Performance Measurement, balanced Scorecards, and Performance Rewards

Capital Budgeting

Managing Costs and Uncertainty

Implementing Quality Concepts

Inventory and Production Management

Emerging Management Practices

Filters

Exam 3: Predetermined Overhead Rates, flexible Budgets, and Absorptionvariable Costing

Cost allocation is the assignment of ____ costs to one or more products using a reasonable basis.

If overapplied factory overhead is immaterial,the account is closed by a debit to Cost of Goods Sold.

Actual overhead exceeds applied overhead and the amount is immaterial.Which of the following will be true? Upon closing,

List and explain the four alternative measures of capacity.

In relationship to changes in activity,variable overhead changes

Which of the following is not a reason to use predetermined overhead rates?

A performance measure that encompasses a firm's long-run average activity is referred to as ____________________ capacity.

Which of the following costs will vary directly with the level of production?

In the formula y = a + bX,y represents

The difference between the reported income under absorption and variable costing is attributable to the difference in the

Dynamic Corporation had the following data regarding monthly power costs: Assume that management expects 500 machine hours in May.Using the high-low method,calculate May's power cost using machine hours as the basis for prediction.

If actual overhead exceeds applied overhead,factory overhead is said to be underapplied.

Predetermined overhead rates are computed based on

A firm has fixed costs of $200,000 and variable costs per unit of $6.It plans on selling 40,000 units in the coming year.To realize a profit of $20,000,the firm must have a sales price per unit of at least

A mixed cost has which of the following components?

Phantom profits result when absorption costing is used and sales exceed production.

If underapplied factory overhead is immaterial,the account is closed by a debit to Cost of Goods Sold.

Introduction to Cost Accounting

Cost Terminology and Cost Behaviors

Activity-Based Management and Activity-Based Costing

Job Order Costing

Process Costing

Standard Costing and Variance Analysis

The Master Budget

Break-Even Point and Cost-Volume-Profit Analysis

Relevant Information for Decision Making

Allocation of Joint Costs and Accounting for By-Products

Introduction to Cost Management Systems

Responsibility Accounting, support Department Allocations, and Transfer Pricing

Performance Measurement, balanced Scorecards, and Performance Rewards

Capital Budgeting

Managing Costs and Uncertainty

Implementing Quality Concepts

Inventory and Production Management

Emerging Management Practices

Filters